The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Friday, December 29, 1995              TAG: 9512290599
SECTION: FRONT                    PAGE: A1   EDITION: FINAL 
SOURCE: FROM WIRE REPORTS 
DATELINE: WASHINGTON                         LENGTH: Medium:   75 lines

DEFENSE-BILL VETO HITS SHIPBUILDER NEWPORT NEWS SHIPBUILDING COULD STILL GET SUB WORK VETO ALSO HOLDS MILITARY RAISES TO 2%, NOT THE PROMISED 2.4%

President Clinton vetoed a $265 billion defense authorization bill Thursday that would have given Newport News Shipbuilding $110 million to compete for contracts on attack subs and would have guaranteed the yard at least two such contracts.

The veto also killed a 2.4 percent military pay raise scheduled for Monday. But Clinton immediately issued an executive order raising military pay by 2 percent - the most he is allowed to do on his own. He urged Congress to promptly pass a bill bringing the total raise to 2.4 percent, the amount in the bill he vetoed.

Clinton's veto also puts at risk a 5.2 percent increase in housing allowances for married members of the armed forces. The issue is especially sensitive, with thousands of American troops headed to enforce the Balkan peace accord. But the president's executive action appeared likely to smooth over much of that problem.

``I welcome separate action on the pay raise,'' Clinton said. ``I want it to be effective Jan. 1, and I will sign it as soon as I get it. We are committed to giving the troops a full pay raise, and we ought to do so immediately.''

Clinton said his veto was primarily in opposition to a Republican demand for a Star Wars-like anti-missile system.

``By forcing such an unwarranted deployment decision now, the bill would waste tens of billions of dollars,'' Clinton said.

He said that the requirement of multiple anti-missile sites would violate the 1972 Anti Ballistic Missile treaty with Russia.

Clinton also opposed what he called unfair provisions in the defense policy bill, banning most abortions at overseas military hospitals and expelling service members who test positive for the virus that causes AIDS.

And he condemned a provision that would require him to ask for funding within 45 days of ordering a troop deployment abroad.

The bill ``would unacceptably restrict my ability to carry out this country's national security objectives and substantially interfere with the implementation of key national defense programs,'' he said.

Clinton also said the bill's restrictions on funding for the Bosnia peacekeeping force would invade the president's foreign policy power.

Clinton's veto does not necessarily kill the sub plan that benefited Newport News Shipbuilding. Congress may include it when a new bill is hammered out.

But the Hampton Roads congressional delegation was united in their disappointment.

``The entire Virginia delegation worked hard to pull this together,'' said Rep. Robert C. Scott, 3rd District. ``Now we've got to start over to make sure the work we've done on the submarines isn't lost.''

The sub program would guarantee Newport News remains in the sub-building business by setting a schedule by which Newport News and Electric Boat of Groton, Conn., share subs through 2003.

It is a reversal of the White House and Pentagon goal, as articulated in the Bottom Up Review, to have all future subs built at Electric Boat.

Clinton's veto of the defense bill is likely to be sustained by the Congress, observers say. Neither the Senate nor the House mustered the two-thirds majorities needed to override a veto.

But the real effect of the veto is questionable, because Clinton has already allowed a bill funding Defense Department programs for the current fiscal year to become law.

Experts said they expect administration officials to reach some accords with congressional leaders informally on issues that are not in dispute.

MEMO: This story was compiled from reports by The Associated Press, The New

York Times, The Newport News Daily Press and The Los Angeles Times. by CNB